Report: Global RE Investment to Hit $478B

David Hutchings, head of research for Europe, the Middle East and Asia (EMEA) for the company, said in a statement that the recovery is now backed by local and international players. "With investor demand for prime space running ahead of supply, yield falls will continue even without any signs of renewed rental growth," he said. "Overall, limited finance may hold back re-pricing in some areas, but we will still anticipate a 25-50 base-point fall in yields globally across all sectors, with Asia again leading the correction."

According to the report, the Asian market is again leading the market, with China seeing a 143% increase in investment in 2009, making it the largest real estate investment market in the world. The UK and the US follow, respectively, though if apartment sales were included, the US would take second place. Eight of the world's top 20 investment markets are now Asian Pacific, including Hong Kong, Taiwan, New Zealand, Australia and South Korea.

The company reports that global rents fell 5.7% in 2009, and another 5% fall is expected the first half of this year. The rent decline reportedly slowed in the second half of 2009, but with an uncertain economic recovery, a demand-led return of rental growth is not yet in prospect, although it is increasingly clear that not all markets will follow the same trend.

Prospects for opportunity investment include Brazil, the report says, which has come out of the recession looking strong, as well as Poland and Turkey. The Middle East is fighting negative press right now, according to Mike Atwell, managing partner in Dubai.

The entire EMEA area saw investment rise in the fourth quarter of 2009, and that should continue, said Michael Rhydderch, head of cross-border investment EMEA. "We current expect volumes to rise 44% to $152 billion, on a par with 2004 trading levels," he said.